MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication
an InvestmentWires' Publication
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MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication |
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Thursday, June 14, 2007 The NYSE Disiplines Crowell, Weedon & Co. for Prospectus Violations Crowell, Weedon & Co. of Los Angeles, California, has consented without admitting or denying guilt to findings of violations of prospectus delivery, Exchange Traded Funds ("ETFs") product description delivery, and customer disclosure requirements by the SEC. The NYSE imposed a penalty of a censure, a $225,000 fine and an undertaking to review the firm’s prospectus delivery and product description delivery practices and procedures Crowell, Weedon & Co. of Los Angeles, California, a member firm, consented without admitting or denying guilt to findings of violations of prospectus delivery, Exchange Traded Funds ("ETFs") product description delivery, and customer disclosure requirements. * An NYSE hearing officer found that from at least 2000 through 2005, the firm did not cause money market mutual fund prospectuses to be timely delivered to customers of the firm in connection with a money market mutual fund sweep program in which such customers were enrolled. * With respect to the ABC money market mutual fund, it was the firm's practice to cause a prospectus to be delivered to its customers on an annual basis at or about the time that ABC would issue an annual updated prospectus for its money market funds, typically effective in November of each year. Thus, customers of the firm that became enrolled in the firm's sweep program with ABC any time prior to November of a given year may not have received a relevant ABC prospectus until in or about November of that year. The delay in prospectus delivery could have been as long as approximately ten months. * During 2001 through at least August 2006, the firm did not cause product descriptions to be delivered to customers who purchased ETFs in their accounts. * In addition, during at least 2000 through 2003, the firm did not disclose to its customers that in order for registered sales staff of the firm to be eligible to attend a sales conference held by the firm at a resort location, the sales staff had to sell a certain dollar amount of the products of specified mutual fund or annuity/insurance companies. These companies acted as financial sponsors of the sales conference. * During at least 2000 through 2003, the firm additionally did not disclose to customers that the firm had a policy to pay its registered sales staff, under certain circumstances, an increased commission on the sales of mutual funds that belonged to specified mutual fund families that appeared on an internal firm list. * The NYSE hearing officer also noted that the firm has initiated certain changes to its sales conference and commission practices and to its money market mutual fund prospectus and ETF disclosure document delivery practices. The NYSE imposed a penalty of a censure, a $225,000 fine and an undertaking to review the firm’s prospectus delivery and product description delivery practices and procedures, to (as necessary) develop written policies and procedures, and cause changes to be made to its (or its agents’) operational systems that are reasonably designed to cause the firm to be in compliance with applicable delivery requirements; and to prepare a report of the review. Crowell, Weedon & Co. consented to the penalty. Printed from: MFWire.com/story.asp?s=14731 Copyright 2007, InvestmentWires, Inc. All Rights Reserved |